This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Energy Recovery Reports Financial Results For The Third Quarter Of 2011

Energy Recovery Inc (NASDAQ: ERII), a leader in the design and development of energy recovery devices for desalination and other industrial processes, announced today the results of its third quarter ended September 30, 2011. With no shipments for mega projects and delayed OEM deliveries, the Company achieved net revenue of $4.9 million for the quarter, reflecting a 29% decrease as compared to the same period of last year. Low production volume in manufacturing, coupled with a mix shift that favored smaller devices, resulted in a gross margin of 15% in the current period as compared to 34% in the third quarter of 2010. The progressive qualification of ceramics production in California and the plant disruption associated with the closure in Michigan, both scheduled for completion by the end of this year, compounded the effects of negative operating leverage and unfavorable product mix, all of which combined to create a significant drag on margins in the current period. The Company’s restructuring and integration activities, however, are expected to generate significant cost savings in 2012 and thereafter.

In the third quarter of 2011, the Company exhausted its potential to carry-back net operating losses within the required look-back period of three years. Accordingly, net operating losses can no longer be applied on a look-back basis; rather, these losses must be carried forward to offset taxable income in future periods. Consequently, the Company recorded a valuation allowance against deferred tax assets and other adjustments in the current period, with a combined value of $4.5 million, in accordance with the accounting guidance and related interpretations regarding accounting for income taxes. Although management clearly believes in the long-term strategic direction of the Company and its future earnings potential, projected revenue and profit in subsequent years do not outweigh prior cumulative losses when assessing the need for a valuation allowance under accounting standards.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs